Miamians save less money than other big-city residents. Here's why
The average South Floridian spends roughly 77% of their pre-tax income, according to 2023 data from the U.S. Bureau of Labor Statistics, the agency's most up-to-date statistics. Only the residents of greater Houston and Phoenix are, on average, less able to save than their Miami counterparts.
It figures. Since the pandemic, out-of-state wealth has flooded into Florida, and particularly greater Miami, whose population of millionaires nearly doubled between 2014 and 2024. That influx of money has driven up local prices, especially for housing.
Meanwhile, local workers' wages have lagged, so much so that more than half of Miami households are living paycheck to paycheck. And the money they do have overwhelmingly goes toward housing.
Many of those households that have little ability to squirrel away funds are in vulnerable positions when emergencies strike, noted David Andolfatto, chair of the University of Miami's economics department.
Ultimately, that limits their ability to save for long-term goals, like paying for college or buying a house, and to respond to crises, like a health emergency, job loss or destructive hurricane.
Why so little savings?
The average Miami area household spends $71,000 per year, according to the Bureau of Labor Statistics. Roughly 37% of that spending goes toward housing. Across the country's 10 largest metro areas, only New Yorkers spend as much.
Roughly six in 10 people living in metro Miami — which includes Miami-Dade, Broward and Palm Beach counties — spend more than 30% of their monthly income on housing. A third spend at least half of their earnings on rent. Miami is now the most rent-burdened metropolitan area in the United States.
That's likely a major reason people are so unable to save, said Shari Bower, vice president and regional director at the Federal Reserve Bank of Atlanta, which covers Florida.
'Miami is one of the least affordable places to live in the U.S., both looking at rents and home prices,' she noted.
South Florida's economy is heavily reliant on tourism, added Bower, which means a relatively high share of metro-area jobs are in lower-paying service sectors — another local dynamic that makes it harder for residents to set money aside.
Then there are the demographic considerations. South Florida has a sizable retired population, many of whom live on fixed incomes and are spending any savings they might have, said Andolfatto, the University of Miami economist.
It also has a large immigrant population. Nearly four in 10 people living in greater Miami are foreign born. Many of them likely send a good chunk of their income back to family overseas, said Bower, leaving them less to save.
But generally, she said, greater Miami's relatively low saving rate is most 'likely due to the high cost of living.'
That extends beyond just housing.
Miami's other chart-topping expenditure: transportation. More than a fifth of the average household's budget is dedicated to getting around — the highest share among major U.S. metro areas, tied only with Houston.
Other major expenses as percentages of average household spending include food (12%) and healthcare (6%).
And recent proposed cuts to federal spending, including on food stamps, Medicaid and housing subsidies, could further diminish households' abilities to save.
'I sometimes think people are what we call penny-wise, pound foolish,' quipped Andolfatto, noting that a lack of financial cushion doesn't just affect individuals.
When people are unable to build even modest savings, they're left more exposed to financial shocks, like unemployment or medical emergencies or hurricanes. And when those shocks hit, the costs can spill over onto the broader public — think, the burdens placed on hospital or criminal justice systems when they process homeless people. Or, noted Andolfatto, the security costs that accompany rising crime, when individuals are in desperate situations and do what they need to do to survive.
'Society is going to pay the price, one way or another,' he said.
This story was produced with financial support from supporters including The Green Family Foundation Trust and Ken O'Keefe, in partnership with Journalism Funding Partners. The Miami Herald maintains full editorial control of this work.
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Mamdani and other rent freeze advocates argue that many landlords of stabilized units are doing fine. Indeed, a report by the Rent Guidelines Board found that these landlords' average income, after subtracting expenses and adjusting for inflation, was up 8% between 2022 and 2023. But that number doesn't give a full financial picture, as landlords could have mortgages and other debts, and it's an average across a very diverse array of buildings. Buildings with rent-stabilized apartments range from brand-new, high-end complexes with sky-high market rents and a small number of stabilized units, to 100% rent-stabilized buildings that have had controlled rents for 70 years. That diversity makes it especially tricky to fit a citywide rent increase to all those units. "We have both the newest, healthiest, most expensive rental buildings in the city and the most distressed, low-rent buildings in the city all under one system, and we're supposed to pick one number," Armlovich said. 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It takes time to build new, permanently subsidized housing, and the private sector isn't sufficiently incentivized to do so, he argued, adding that renters need immediate relief. "Lobby for less taxes if that's what's the problem," Leyva said of landlords who feel squeezed by operating costs. "But the tenants can't give more."
